The prominence of private-label proteins in supermarket deli and meat departments is resulting in very public marketing challenges.

While co-packed products can enable retailers to differentiate their offerings and generate higher revenues, getting consumers to sample items and become repeat purchasers remain arduous endeavors.

For programs to prosper, merchandisers must first conduct extensive shopper research and then offer proteins that meet the unique needs of consumers in different store locations, analysts say. Methods can include focus groups, in-store intercepts, on-line research and inspection of sales data.

“Many retailers outline competitive strategies but don’t take into account geographic factors, including the economic and competitive differences in each area,” says Stephen Rannekleiv, vice president of food, agribusiness and advisory in the New York office of Rabobank, a Utrecht, Holland-based cooperative bank that focuses on food and agriculture. “Consumer interest in healthy foods, for instance, remains strong, but in some locations there are limitations on how much shoppers can pay for those items. There must be an appropriate strategy for each local market.”

Misty High, assistant vice president of marketing for Wichita, Kan.-based Cargill Meat Solutions, agrees.

“One size does not fit all,” she states. “The demographics and psychographics of each store will differ.”

Cargill, a leading nationwide supplier of beef to private-label retail programs, also supports several of its own beef brands, including Angus Pride, Angus Farms and Sterling Silver. Through exclusivity arrangements with retailers, the Cargill brands also function as store brands in many locations.

To generate the strongest interest from shoppers, private-label proteins should be promoted with such methods as samplings, signage, labeling and Web site promotions, High says.

It is important that specific attributes are spotlighted, she adds, such as breed, grade and the degree of tenderness for beef.

“The brand has to stand for something and can’t just be a name,” she notes.

Indeed, Tim Ross, principle of Kendall Ross, a Seattle-based brand development and design firm, says private-label proteins need strong identities and marketing programs should emphasize product benefits and unique characteristics. Elements can include taste, freshness, convenience, cost or being locally developed.

Messages, however, must be relevant to the targeted customer segment.

“Claims have to be believable,” Ross says. “Consumers know what marketing is and can see through it.”

Merchandisers, meanwhile, face the challenge of pinpointing the optimal merchandising vehicles for each co-packed item.

Decisions are vital as retailers typically have smaller promotional budgets and fewer support staff than national brand marketers, notes Steve Frissora, managing partner and vice president of sales and marketing for Arcanna Inc., a Peekskill, N.Y.-based brand development company.

Possible tools include in-store fliers, Web sites, local television and radio advertising, and the cross merchandising of private-label proteins with other store categories, adds Robert Frissora, Arcanna president. Deli items, for instance, could be marketed with breads or spreads, he notes.

Retailers also can benefit from marketing co-packed proteins in distinctive packaging, Steve Frissora says.

“More purchasing decisions are being made in aisles and shoppers often can recognize a good buy from the packaging,” he states. “It is resulting in the greater availability of convenience-type containers.”

Robert Frissora adds that unique packaging also is one of the least-expensive ways to move a product, but notes that, “it has to be functional.”

A tasty and healthy protein, however, is key for many potential store-brand shoppers.

“Consumers are more astute and savvy,” he says. “The challenge for retailers is coming up with innovative items and reinforcing to customers that they are getting equal or greater quality than the national brands at the same value.”

To better acquaint shoppers with such foods, retailers should support in-store samplings—particularly if the price of the proprietary product is substantially less than comparable national brands, states Mike Mettille, a co-packing/private label specialist with West Liberty Foods LLC, a West Liberty, Iowa-based co-packer of party trays, sliced meats and fully cook proteins.

“Some consumers may think that if it costs less it won’t taste as good, but that often is not the case,” he notes. “Price is not enough to retain shoppers. The product must also be of high quality.”

Retailers can entice shoppers to sample private-label proteins with coupons, the inclusion of proprietary meats in made-to-order deli sandwiches, and by printing attributes on packages, Mettille states.

“Many customers are hooked on the national brands that they have bought since childhood,” he says. “It is important to enhance the perception of the private-label product in order to get shoppers to try it the first time.”

The forecast for co-packed proteins, meanwhile, is favorable, especially because the price of many national meat and deli brands are likely to rise over the next few years, says Steve Frissora.

Indeed, in a recent report on the U.S. food retailer market, Rabobank notes that, “Margins for many traditional retailers will likely become increasingly stressed for the near future, but the one bright spot has been the growing market of private-label products, which respond to consumer demand for lower prices and provide attractive margins for retailers.”